HELENA, Mont. (AP) -- A federal appeals court on Wednesday rejected claims that author and humanitarian Greg Mortenson committed fraud by lying in his best-selling book "Three Cups of Tea" to boost sales and donations to the charity he co-founded.
A panel of 9th U.S. Circuit Court of Appeals judges upheld a Montana judge's decision to dismiss a lawsuit brought by four readers of "Three Cups of Tea" and its sequel, "Stones Into Schools."
The memoirs recount how Mortenson started building schools in Pakistan and Afghanistan, with "Three Cups of Tea" selling about 4 million copies since being published in 2006. The lawsuit was filed in 2011 after "60 Minutes" and author Jon Krakauer reported that Mortenson fabricated passages in the books.
The four plaintiffs from Montana, California and Illinois who bought Mortenson's books claimed that they were cheated out of about $15 each because the books were labeled as nonfiction.
They said Mortenson, co-author David Oliver Relin, Penguin and Mortenson's charity, Central Asia Institute, were involved in a fraud and racketeering conspiracy to build Mortenson into a false hero to sell books and raise money for CAI.
U.S. District Judge Sam Haddon dismissed the lawsuit last year, calling the allegations "flimsy and speculative."
The plaintiffs appealed to the 9th Circuit, but the appellate panel said Haddon ruled properly. The readers' claims contained "minimal factual allegations" and did not specify the defendants' roles in the alleged racketeering scheme, the judges said in the order.
"Three Cups of Tea" recounts how Mortenson lost his way after a failed mountaineering expedition and was nursed back to health in a Pakistani village, leading him to build a school for them.
Mortenson has acknowledged some of the events in the book were compressed over different periods of time, but denied any wrongdoing. He was in Tajikistan on Wednesday and declined to comment in an email.
Central Asia Institute Chairman Steve Barrett said in a statement he was pleased with the decision.
A message left for plaintiffs' attorney Zander Blewett was not immediately returned.
The Krakauer and "60 Minutes" reports prompted a separate Montana attorney general investigation into the Central Asia Institute. That probe determined Mortenson benefited financially from donations to the charity and mishandled its finances and operations.
A settlement with the state resulted in a reorganization of CAI and called for Mortenson to repay $1 million.
Relin killed himself last year in Oregon. He said in previous legal filings that his career suffered from the allegations over the books.
Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.